State of the Art Contractor: Accrual Accounting Easier by Computer

The California State Contractor's
License Board tells me that contractors
fail in business mostly due
to poor business ability, not lack of
trade knowledge. And those who
fail as a result of bad business ability
most often use the cash method
rather than the accrual method of
accounting. The upshot: A novice
contractor using the cash method
may be working against big odds.
Cash Method
The cash method of accounting
records income and expenses in
the profit-and-loss statement when
money is actually received or paid
out. Although this method may
work for some, it can be a poor
indicator of the real ins and outs of
cash flow.
For example, if bills for a job
aren't paid for a month after